The 'Edge Report Blog

Exploring Implications of the MACRA Rule with Health Plan Executives

Harry MerkinJuly 25, 2016

In June, a select group of health plan executives and other healthcare leaders gathered for a roundtable discussion to share their perspectives on MACRA, the Medicare Access and CHIP (Childrens’ Health Insurance Program) Reauthorization Act, which was passed by Congress with extensive bipartisan support in April of 2015, and whose rule was issued by CMS on April 27, 2016. MACRA calls for payment reform, including positive annual payment updates to physicians, replacing the Sustainable Growth Rate. At the same time, MACRA provides for both incentives and penalties to payments, based on quality measures and patient outcomes. With the initial measurement period set to begin on January 1, 2017, and payments based on those measures scheduled for 2019, health plans are compelled to prepare for the change to value-based contracting and quality-based outcomes that MACRA will bring with it. MACRA will initially impact Medicare, with the intent to extend to Medicaid and ultimately commercial health insurance within five years, as the rule is written.

Andy Slavitt, the acting Administrator of CMS, recently stated in a hearing before the US Senate Finance Committee that CMS’ goal is to transform at least 50% of Medicare payments to advanced Alternative Payment Models by 2018.  Qualification for Advanced Payment Model status, which has several criteria including a requirement for the provider to share risk, also entitles providers to an additional 5% incentive payment for Medicare Part B reimbursements, beginning in 2019.

Experts from the Deloitte MACRA team helped facilitate the industry roundtable, and pointed to the historic nature of the changes associated with MACRA.  They explained that the rule represents a government mandate for the transformation to value-based payments, with a finite schedule in place for the first time.

Health plan executives attending the roundtable considered many aspects of the anticipated changes, including:

  • How quickly the government’s push for pay for performance could truly extend beyond Medicare, into Medicaid and commercial plans and the resulting changes to payer-provider networks and contracts
  • The need for process changes and improved efficiency in how a population is identified and treated, particularly those in at-risk categories
  • The urgency for health plan IT organizations to have a detailed understanding of the agility and flexibility required to handle changes to provider payments based on performance. Participants stressed that this is a key ingredient for system success that will translate to the financial health of the plan
  • The ability for a health plan to consider members strategically and with a long-term view, particularly by establishing quality results for younger members and those with lower risk, to create a membership base with high loyalty for the future
  • The potential impact the law will have on smaller and rural practices. “Virtual groups” of providers will be facilitated by CMS, along with $20 million of funding, all designed to aid providers of all sizes to participate in the Advanced Payment Model program
  • How the inclination for health plans to narrow provider networks to work with highly rated physicians must be balanced with proper access to healthcare services.
  • The consensus that much of healthcare is local and community based, and MACRA could encourage opportunities to strengthen those relationships in places where the linkage is already strong
  • The realization that those providers and provider entities that are in denial (I.e. some IDN’s) are in for a shock.

The attendees at the roundtable agreed to stay in touch and share plans, perspectives and their individual stories as MACRA continues to unfold. All of them agreed that as the first mandated measurement period quickly approaches, action is needed to be ready for the next major push to value-based payments and pay for performance.